Zurich Life saw a record-high profit for its life insurance, totalling $2.1bn for 2023, according to its latest results.
Life showed business operating profit of $2,060m in 2023, up from $1,487m in 2022. In US dollar terms, that represented an increase of 39%, but in like-for-like terms, it represented an increase of 55%.
The year-on-year increase reflected solid underlying performance of the business, favourable experience, as well as the non-repeat of approximately $350m of adverse impacts from transition related adjustments and other one-offs which occurred in 2022.
Underlying performance benefited from higher customer service management (CSM), strong growth in the short-term protection business and improved fee results.
Meanwhile, the present value of new business premiums for life insurance also increased to $16.4bn, up from $13.2bn in 2022.
Life insurance new business premiums increased 24% in US dollar terms and 26% on a like-for-like basis, with growth in EMEA, Asia-Pacific and Latin America.
Key drivers of growth included large sales volumes of a retail savings product in Spain, written by the group’s joint venture with Banco Sabadell primarily in the first quarter, protection sales in Asia Pacific and unit-linked sales in Latin America.
New business written in the year added $1,037m to the contractual service margin (CSM), 5% more than in the prior year, with increased sales volumes more than offsetting the impact of lower new business margin due to a less favourable business mix.
Overall profit
The life results contributed to Zurich’s overall profit of $7.4bn – its highest ever.
“The excellent results of the life business reflect the ongoing successful execution of the group’s life strategy that focuses on protection and capital light savings business,” Zurich said.
“Top-line growth was strong in all parts of the business, contributing to profit growth.
“Long-term insurance saw an increase in new business premiums, which will drive profits over time, and short-term insurance continued to grow strongly while maintaining stable underwriting margins.
“Fee business saw a strong improvement compared with the prior year, which was affected by adverse market performance.”
Looking ahead, Zurich expects compound annual growth in 2023-2025 earnings per share (EPS) to exceed 10%.
That compares with the target of 8%, which was established in 2022.
Zurich expects profit from life products to at least be in line with the record high level of 2023, Zurich said.
Mario Greco, CEO of Zurich, said: “We delivered record returns in 2023, well ahead of all targets for 2023-2025, with particularly strong growth in P&C and life and highly effective management actions at the farmers exchanges.
“I expect this positive momentum to continue and to achieve EPS growth above 10% over the cycle.”